[MOL] Insurance and how it really works! [00151] Medicine On Line

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[MOL] Insurance and how it really works!

Cancer Providers Contributions

By The Associated Press

In the past decade, cancer insurance providers have engaged in aggressive lobbying at the state and federal levels.

American Family Life Assurance Company of Columbus, Ga., has led the industry. From 1993 to 1998, it gave $30,000 to Rep. Michael ``Mac'' Collins, according to Federal Election Commission records. Collins introduced the provision to the Kennedy-Kassebaum bill that altered disclosure warnings.

The company gave to other members of the Ways and Means Committee, involved in producing the bill. Rep. Charles Rangel, D-N.Y., received $25,000 and Rep. John Lewis, D-Ga., received $27,000. Colonial Life & Accident Insurance Company and its affiliate, UNUM, gave $4,000 to Rangel.

Sen. Orrin Hatch, R-Utah, on the Senate Finance Committee's panel on Medicare and long-term health care in 1994, received $10,000 from AFLAC in 1993-94 and $2,000 from Colonial Life. Individual employees of AFLAC also gave thousands of dollars to Hatch and Rangel.

``We have had a very active role in politics on a bipartisan level,'' said Kathelen Spencer, AFLAC's spokeswoman. But she denied that AFLAC benefited from changes in the language passed by Congress.

On the state level:

-In New York, the 23-year-old ban against cancer insurance was lifted last February. AFLAC has spent $65,000 in donations to state politicians since January 1995. According to Board of Election records, all but a few thousand went to the state's Republicans and Gov. George Pataki's campaign.

Beginning in 1992, the company spent an average of $50,000 a year on lobbyists during the period that Pataki succeeded Mario Cuomo. From 1992 to 1998, AFLAC incurred more than $300,000 in lobbying costs, according to the New York Temporary State Commission on Lobbying.

-In Connecticut, a law in 1997 allowed companies to sell disease-specific insurance and ended a 21-year ban on cancer insurance. AFLAC spent $27,000 in 1995 and $34,700 in 1996 on lobbyists. In 1997, the company hired three firms for more than $100,000, according to State Ethics Commission records.

-In New Jersey, which still bans the policies, AFLAC spent $78,189 on a lobbying firm in 1995, $74,893 in 1996 and $86,678 in 1997. AFLAC lobbyists donated $16,500 to Republican committees in 1996 and $11,000 in 1997.

Cancer Insurance Makes Comeback

By KALPANA SRINIVASAN Associated Press Writer

WASHINGTON (AP) - Long seen as a gimmick that preyed on the fears of the elderly, cancer insurance is gaining new ground by offering flexible benefits and promoting itself with heavy advertising and lobbying.

Providers of such single-disease policies may have touched a new fear among Americans: not just that they will be struck with a life-threatening illness, but that the current state of health insurance will make it impossible to afford the care they need.

Companies have used aggressive lobbying in an effort to shed their image as a bad deal and to ease state and federal restrictions. And some people are responding.

``When you have such a catastrophic thing as cancer laid in your lap, I think anybody needs a cushion,'' said Peggy Fincher of Jackson, Miss., who used $2,800 from a family policy to seek alternative treatments when her husband was diagnosed with prostate cancer.

Yet many critics insist that cancer policies and others that protect against only one disease are still a bad deal.

``It's a dramatic appeal to ignorant consumers,'' said Robert Ball, a Medicare expert in Alexandria, Va. ``Supplemental insurance does have value - but not disease by disease.''

Cancer policies cover only ``one-tenth or one-twentieth of your risk,'' even though they cost one-half of regular medical insurance, says Bob Hunter of the Consumer Federation of America.

Indeed, while nearly all states now allow cancer policies - and several have recently dropped bans - some still regulate the product and warn the devil is in the details.

Cancer insurance generally provides lump-sum, cash payments directly to the person covered by the policy, regardless of whether a major policy already pays for cancer treatments.

Policies will usually set aside a certain amount to pay - such as $200 each day of chemotherapy. The money can be used instead for alternative treatment, home care or to make up for lost wages.

Throughout the 1980s, tales of elderly people stacking policy upon policy, and of companies failing to pay, prompted consumer groups to push for regulation.

Mary Lou Ingalsbe of West Plains, Mo., who had surgery for endometrial cancer last year, had medical bills topping $12,000. But when she filed claims, she received nothing.

``You don't want to have to fight just to get what you are entitled to,'' said Ingalsbe, who had been paying premiums for nearly 20 years. Her state insurance commission eventually reclaimed a few hundred dollars for her.

Over the past few years, companies have had some success improving their reputation with aggressive lobbying:

-New York state last February lifted a 23-year-old ban on cancer insurance. American Family Life Assurance Co., of Columbus, Ga., had spent $65,000 in donations to state politicians since 1995. From 1992 to 1998, AFLAC also spent more than $300,000 on lobbying.

-Connecticut lawmakers in 1996 voted to allow companies to sell disease-specific insurance, ending a 21-year ban. AFLAC spent more than $161,000 on lobbyists there from 1995 to 1997.

-And in New Jersey, which still has a cancer policy ban, AFLAC spent nearly $300,000 on lobbyists from 1995 to 1997.

Federal regulations also have been loosened. Congress in 1994 dropped a ban on the sale of benefits that overlap with Medicare. Instead, policies were required simply to carry a warning that supplemental policies must pay even if they overlap.

Then in 1996, Congress in a little-noticed amendment to massive insurance legislation - the Kennedy-Kassebaum bill - changed the language on disclosures, softening it in consumer groups' view.

``What we have seen is a gradual erosion over the last five years of the protections seniors have,'' says Gail Shearer of Consumers Union.

AFLAC has given hundreds of thousands of dollars since 1993 to key members of Congress, including Rep. Michael ``Mac'' Collins, R-Ga., who introduced the Kennedy-Kassebaum provision.

AFLAC and other companies, however, say the new labels simply clarify that cancer policies must pay.

And even as they lobby, the companies also ``are helping to clean up the game,'' says Jim Czesak of HCM Benefits Inc., of Torrance, Calif., which advises businesses on employee benefits.

Companies are forced to create better policies because of increased competition and state rules on ``loss-ratios'' - the amount in premiums that should be paid in benefits, Czesak said.

And they're branching into new types of marketing.

Rewards Plus of America, a Baltimore business that assembles benefit packages for companies to offer workers, recently added cancer insurance. Workers can have premiums deducted from paychecks. And Discover Card Services began enclosing ads in mailings to card members in April.

The field is growing ``either due to concerns about reduced reimbursement through major medical plans, or lack of flexibility of managed care,'' said Kathelen Spencer, spokeswoman for AFLAC, which sold nearly $98 million in new policies in 1997 with annual premiums from $250 to $350.

Indeed, most people polled this year want HMOs - now the dominant type of health insurance - to provide broader coverage, including for specialists.

Even though more states now permit cancer policies' sale, they still worry about consumer confusion.

Connecticut requires agents to point out that cancer insurance is supplemental.

In Arizona, customers 65 or older must sign a form that they understand it may duplicate Medicare. California prohibits cancer policies' sale to those over age 65 altogether.

And Washington state's insurance commission spokesman warns that though it's allowed, cancer insurance is probably not a ``smart bet.''

Coverage Offered by Cancer Policies

By The Associated Press

What cancer insurance policies cover:

-Most companies cover treatments such as radiation and chemotherapy, bone marrow transplants and skin cancer surgery, subject to certain conditions.

-Some, like AFLAC and Colonial, also offer a wellness benefit. Policyholders receive an annual payment if they get certain tests such as mammograms or prostate cancer screenings. This could amount to $150 returned to a family who pays $360 a year in premiums.

-Many policies have fixed dollar limits. For example, a policy might pay only up to $1,500 for surgery costs or $1,000 for radiation therapy, or it may have fixed payments such as $50 or $100 for each day in hospital. Others limit total benefits to a fixed amount such as $5,000 or $10,000.

-No policy will cover cancer diagnosed before you applied for the policy. Some policies deny coverage if you are later found to have had cancer at the time of purchase, even if you didn't know it.

-Many policies contain time limits. Some require waiting periods of 30 days or even several months before you are covered. Others stop paying benefits after a fixed period of two or three years.

-Some states mandate what cancer policies must include: Maryland requires coverage of hospice care. Providers must cover reconstructive breast surgery after a mastectomy. Tennessee requires coverage for prostate cancer screenings for men over 50, provided they are recommended by a doctor.